Index: link/link.module
===================================================================
--- link/link.module	(revision 65)
+++ link/link.module	(working copy)
@@ -391,7 +391,8 @@
     }
   }
   // Require a link if we have a title.
-  if ($instance['settings']['url'] !== 'optional'
+  if (!empty($entity) // If entity is empty, we're on the field config form. Do not validate the URL.
+      && $instance['settings']['url'] !== 'optional'
       && strlen(isset($item['title']) ? $item['title'] : NULL) > 0
       && strlen(trim($item['url'])) == 0) {
     form_set_error($field['field_name'] . '][' . $langcode . ']['. $delta .'][url', t('You cannot enter a title without a link url.'));